NEW DELHI: Over 12 years after its launch, the government hopes to achieve the target of mandatory mixing 5 per cent ethanol in petrol this year, Oil Minister Dharmendra Pradhan said.

Also, doping of non-edibile oil, called bio-diesel, in diesel will begin this fiscal with 11 crore litres being contracted, he said.

Speaking at a National Seminar on Lignocellulose Ethanol, Pradhan said the programme to mix ethanol extracted from sugarcane molases was started in 2003 with a view to cut India's dependent on imports to meet its oil needs as well as provide remunerative price to sugarcane farmers but it lost steam with the change in government in 2004.

Against the requirement of minimum 120 crore litre of ethanol for meeting the mandatory 5 per cent blending, only 30.6 crore litre was doped in 2011-12 which dropped to 15.4 crore litre in the following year, he said.

While 5 per cent blending was mandatory, the programme called for raising the level to 10 per cent.

The NDA government after coming to power in 2014 decided to raise the price at which ethanol will be procured to Rs 48.5-49.5 per litre.

"In the sugar year 2015-16 (October 2015 to September 2016), we will be procuring at least 120 crore litre and are hopeful of meeting the 5 per cent target," he said.

"I am confident we will reach that figure this year," he said. "The ethanol blending programme has multiple objectives - to reduce import dependence and save foreign exchange outgo, give farmers right price for their crop, cut carbon emissions and create jobs."

Sugarcane growing states like Uttar Pradesh are likely to see up to 9 per cent ethanol blending in petrol, he said adding technology provides for 15-20 per cent of ethanol being mixed in petrol.

To raise the percentage of blending, the government has now permitted use of lignocellulose ethanol which is made from baggase, paddy and cotton straw, wheat straw, wood chips and energy cane and bamboo, he said.

It is estimated that surplus biomass of 120-160 million tons can produce 2500-3000 crore litre of ethanol per annum. Even if 10 per cent of the surplus biomass is tapped, it can produce 250-300 crore litre of ethanol.

Lignocellulose ethanol is being tapped because it is estimated that the demand for petrol will rise to 4404 crore litre by 2022, requiring 330 crore litre of ethanol to meet the target of 10 per cent blending.

Pradhan said for diesel, a tender to procure 85 crore litre bio-diesel was floated. As much as 11 crore litre was offered in the tender, of which 4 crore litre has been contracted at Rs 40 per litre.